Beware of PUMP AND DUMPS - Alt Coin Exchanges
It's important to understand what Pump and Dump's are if you're going to be working in Alt Coin Exchanges like in my last post.
The process of Pumping and Dumping a coin is when a group of "investors" buy a coin at a low price, inflate the price and then sell it off. How do they do this? Often enough it ends up as a feeding frenzy between group members that are trying to buy in and members that are trying to sell out. If you aren't a group member that's first in line for that ultra low price you end up buying in higher and getting out is harder. Among the feeding frenzy you have outsiders who have been attracted by the buzz put out by group members (false advertising to get people to buy the coin), and day to day investors who see an increase in volume and price.
At the end of this 5 minute frenzy the people left with the stock lose. There are no real buyers for the coin at this price.
To avoid these schemes use the chart imagery and make sure you are buying at a relatively stable price. If the stock is moving wildly it's best to find a different stock to invest your pennies in.
Hope this helps!
Yeah I learned my lesson the hard way trying my hand at day trading. That's why I mostly invest and HODL now. Some shorts but mostly longs. Good advice though.
I decided to post this today because these groups are apparently starting up again no that the bear market seems to have subsided a bit.
Organized pump and dumps are a dubious practice that probably is illegal or eventually will be.
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